1. Appellants filed a Revision Application before the Government of India under Section 131 of the Customs Act, 1962 (hereinafter called the Act), as it existed before its amendment by the Finance Act, 1980 (No. 2 of 1980), which stands transferred under the provisions of Section 131-B ibid to the Appellate Tribunal to be disposed of by the Tribunal as if it were an appeal presented before it.
2. The appellants imported a consignment 'Air Dryer MA 1000-180-207 E Electric Heater and Drive Motor for 400 V, 50 HZ'. The Bill of Entry was presented in the Import Department of the Bombay Custom House on 17-10-77 when the goods were assessed under Heading No. 84.59(1) of the First Schedule to the Customs Tariff Act, 1975 and duty levied at 60%+15% Basic Customs duty and Auxiliary duty respectively. The appellants paid the Customs duty as well as auxiliary duty as per this assessment on 21-11-1977.
3. It appears that by notification No. 214-Customs dated 15-10-1977, duty under Sub-heading (1) of Heading No. 34.59 of the First Schedule to the Customs Tarrif Act, 1975 (Import Tariff) had been reduced 40% ad valorem and correspondingly the auxiliary duty also stood reduced from 15% to 5%. The appellants and the Department, on the date the Bill of Entry was presented and duty paid, do not seem to have been in actual knowledge of this notification. The appellants later made a claim for refund on 18-11-1978 to the Assistant Collector of Customs, who rejected the claim as barred by limitation laid down in Section 27(1) of the Act.
4. In appeal, the Appellate Collector of Customs, Bombay held that the appellants' claim for refund was barred not only by limitation but was also not tenable on merits. From his orders, it appears that he held that the Notification aforesaid reducing the rate of duty was issued after the act of importation had' already been completed (the vessel which imported the said goods anchored in Indian/Customs waters on 6-10-1977). He held that the rate of duty had been correctly charged.
With these findings he dismissed the appeal.
5. Aggrieved by this order, the appellants filed a Revision application before the Central Government, which as earlier pointed out, is to be disposed of by this Tribunal, as if it were on appeal presented before it.
6. In the grounds of Revision (appeal), while reiterating the earlier grounds, the delay in filing the refund claim is explained as being due to an audit objection to the classification of the goods under Heading No. 84.59(1) It is stated that, as a result of this objection, a less charge demand was made from the appellants which they fought out.
Ultimately, the less charge demand was withdrawn by the Customs House by letter No. S/2-243/78, dated 18-11-78 and immediately on this very date, the appellants made the claim for refund, before the Assistant Collector. In the meanwhile, the six months period fixed for making claim under Section 27(1) of the Act had expired. It is stated that the delay in submission of the refund claim was beyond the control of the appellants. In the grounds of Revision (Appeal), reference is made to a judgment of the Supreme Court in the case of A. V. Narasimhalu v. Union of India (Civil Appeal No. 1361/66, dated 1-9-1969 and Anr. judgment of Bombay High Court in Misc. Petition No. 666/62, dated 6th December, 1977 in the case of M/s. Paper Products Ltd. v. Union of India, 1981 ELT 538 (Bom.). It is urged that Government cannot refuse to refund a tax illegally and improperly collected by it on the technical ground of time bar. It is further urged that in a case of this nature, the limitation provided for in Section 27(1) of the Act is not applicable and the provision applicable in such cases in Section 72 of the Indian Contract Act, 1872 and the limitation for such claims would be 3 years.
7. After the Revision application was filed before the Central Government, this Tribunal was set up on 11-10-1982, in consequence of amendment made in the Customs Act, 1962 by the Finance Act, 1980 (No. 2 of 1980) providing for setting up of the Appellate Tribunal. The Tribunal had also made the Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982, in exercise of the powers conferred by Sub-section (6) of Section 129-C of the Act and similar provision contained in the Central Excises and Salt Act, 1944 and the Gold (Control) Act, 1968. These rules came into force on 25-10-1982.
8. The appeal was first fixed for hearing before the Tribunal on 8.12.1982, when Shri Ashok Grover, Advocate appeared for the appellants and Shri N.V. Raghavan Iyer, Senior Departmental Representative, representing the Collector of Customs, Bombay orally raised a number of preliminary objections. He was directed to make his objections in writing. This was done. It is not necessary to describe, in detail, all the objections raised by Shri Iyer. The material objections are that under Sub-section (4) of Section 129-A of the Act, 45 days time should be given to the Respondent Collector of Customs to file cross-objections against the order of the Appellate Collector of Customs ; and that Notices of the date of hearing should have been issued to the Collector of Customs and ought not to have been served on the Departmental Representatives.
9. The Appellants' Advocate filed reply to the objections raised by the Departmental Representative. The appellants opposed the objections raised by the Respondent. The parties were then heard on 15-12-1982, on these preliminary objections when the Tribunal found that the request of the Respondent that he be allowed to file cross-objection was legally untenable. The prayer was rejected and it was indicated that a reasoned order on these points would, be passed later. Reasons for order on the preliminary objections are set out at the appropriate place.
10. Later, the appeal was heard on 20-12-1982. The parties were represented as before. The parties were asked to address the Tribunal first on the question of limitation and they were told that if necessary, they would be heard again on merits. This order would thus dispose of preliminary objections raised by the parties, as mentioned above, and the question of limitation under Section 27(1) of the Act.
11. Dealing first with the question whether the Respondent Collector of Customs, Bombay, who has been impleaded as a party in this appeal by virtue of Sub-rule (3) of Rule 12 of the Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules 1982, has a right to file cross-objections before the Tribunal, Sub-section (2) of Section 131-B of the Act to the extent material for the present appeal may be reproduced : "(2) Every proceeding which is pending immediately before the appointed day before the Central Government under Section 131, as it stood immediately before that day, and any matter arising out of or connected with such proceeding and which is so pending shall stand transferred on that day to the Appellate Tribunal and the Appellate Tribunal may proceed with such proceeding or matter from the stage at which it was on that day as if such proceeding or matter were an appeal filed before it." "Provided further that the applicant or the other party may make a demand to the Appellate Tribunal that before proceeding further with that proceeding or matter, he may be re-heard." 12. The orders of the Appellate Collector of Customs are dated 3-12-1979. To such an order, the provisions contained in Sub-section (2) of Section 129A of the Act would not apply. It was not disputed that the Respondent had no right of an appeal against the order passed by the Appellate Collector of Customs. The appellants filed only a revision application before the Central Government under Section 131 of the Act, as it then stood, which, under Section 131B of the Act, stands transferred to the Tribunal to be disposed of as if it were an appeal presented before it. Section 131B of the Act is only a transitional provision dealing with the procedure relating to appeals and proceedings pending before the Board and the Central Government and transferred to the Tribunal in consequence of the amendment. The provision only provides for a new forum and does not create any new rights in favour of the Respondent.
The words "as if such proceeding or matter were an appeal filed before it" would not mean that the Revision Application filed before the Central Government has become an appeal before the Tribunal for all purposes. Otherwise, there was no necessity to say that "the Tribunal may proceed with such proceeding or matter from the stage at which it was on that day" and to provide for the applicant or other party making a demand for hearing or re-hearing before the Tribunal proceeds further with the proceeding or matter.
The proceeding though called an appeal before the Tribunal still retains the character of a Revision application. The question of a cross-objection can arise only in an appeal and not in a Revision Application. It is also to be kept in mind that the Respondent, though earlier he had no right of an appeal, if dissatisfied with the orders of the Appellate Collector, could suitably move the Government of India for review or revision of the orders of the Appellate Collector of Customs, which he obviously failed to do. That not having been done, the Respondent cannot, at this belated stage, be heard to say that merely, because the Revision Application filed by the Appellants is to be disposed of as if it were an appeal, he should be allowed to file cross-objection. It is well settled that the right of cross-objection arises only when the party demanding such right had no right of an appeal and did not exercise such right and wants to file cross-objection, when the other party has filed an appeal. The Respondent admittedly had no right of an appeal. Therefore, the Respondent cannot claim a right to file cross-objection. The prayer, therefore, of the Respondent for grant of time to enable him to file cross-objection for the aforesaid reasons was, by summary order dated 15-12-1982, rejected.
13. Even otherwise, we fail to understand what cross-objections the Respondent could have filed in the present appeal even if it was legally permissible to do so. The Appellate Collector of Customs had found in favour of the Respondent both on the ground of limitation and on merits; the Respondent could not have challenged through cross-objection any of these findings which were wholly in Respondent's favour.
14. As to Shri Iyer's objection that the notice of the date and place of hearing should have been served under Rule 18 of Customs, Excise & Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 on the Collector of Customs, who is the Respondent in the appeal, it is sufficient to say that during the arguments, Shri Iyer admitted that he had appeared to represent the Collector, who is the Respondent in the appeal. In view of this admission, whether or not in serving notice intended for the Collector of Customs on the Senior Departmental Representative there was compliance with the rule is an academic question. In any case, the Collector, who is the Respondent, is sufficiently and properly represented in the appeal before the Tribunal. Literal non-compliance, if any, with the rules has not occasioned of any failure of justice. This contention is, therefore rejected.
15. The Appellate Collector of Customs, as already pointed out, rejected the appellants' appeal both on the ground of limitation and on merits. For the purposes of this order, we would proceed on the premise that the duty payable by the appellants on 17-10-1977 was in terms of the amended notification i.e. appellants were liable to pay duty at the reduced rates. We are not entering into the question whether, in view of the ship bringing the goods having anchored in Indian waters on 6-10-1977, the appellants were entitled to the benefit of the reduced rates of duty or not as a result of notification dated 15-10-1977.
16. Coming to the question of limitation under Section 27(1) of the Act in the appellants' making claim for refund before the Assistant Collector of Customs. Shri Ashok Grover, the learned Counsel for the appellants, has vehemently contended that reading sections 15 and 46 of the Act, the duty leviable on the goods was at the rate prevalent when the Bill of Entry was filed and the goods removed from the Custom House for home consumption. The Bill of Entry was presented on 17-10-1977 when, by Notification No. 214-Cus., dated 15-10-1977, the duty under Sub-heading (1) of Heading 84.59 of the First Schedule to the Customs Tariff Act, 1975 had been reduced to 40% ad valorem and correspondingly the auxiliary duty had also been reduced from 15% to 5%. It is the latter rate to which the goods were legally chargeable.
The excess duty assessed and recovered from the appellants was illegal, erroneous, beyond jurisdiction and without authority of law. In such a case, the limitation stipulated by Section 27(1) of the Act could not be applicable. In support of his submission Shri Grover, besides the cases referred to in the grounds of Revision Application strongly relied in particular on Patel India (Pvt.) Ltd. v. Union of India and Ors.-A.I.R. 1973 S C 1300, Assistant Collector of Customs, Madras and Ors. v. Prem Raj Ganpat Raj & Company (Pvt.) Ltd.-1978(8) Tax L.R.1776) (Photostat copy of judgment filed) and the Paper Products Ltd. v.Union of India, (Bombay High Court) dated 6th December, 1977-1981 E.L.T. 538, (photostat copy of the judgment filed).
17. Shri Iyer, Senior Departmental Representative, on behalf of the Respondent, submitted that the Tribunal is an authority created by the Customs Act, 1962 and is bound by the limitation set-out in Section 27 of the Act. Reliance for this argument has been placed on Prem Raj & Ganpat Raj & Company (P) Ltd. v. Assistant Collector of Customs, Madras and Ors.-1977 E.L.T. (J 166).
18. We have carefully considered the arguments of Shri Grover and Shri Iyer and scrutinised the precedents cited by them. It might be stated that Section 17 of the Act has provision under which the limitation of one year or 6 months shall not apply where any duty has been paid under protest. Admittedly the appellants did not pay duty under protest.
Patel India (Pvt.) Ltd. v. Union of India-A.I.R. 1973 S.C. 1300 is a case relating to Section 40 of the Sea Customs Act, 1878 which was, to some extent, analogous to the present Section 27 of the Act. It is, however, to be seen that in Section 40 of the Sea Customs Act, there was no provision like the proviso referred to supra Para 16 of the judgment shows that the appellants' Company in that case had paid duty under protest with a view not to incur demurrage charges. In the instant case, the appellants have not paid duty under protest as had been done in that case. Had they denoted, not only the ruling but the proviso would have applied rendering the limitation inapplicable. The case on facts would not be applicable to the facts of the present case and is distinguishable. On the other hand, in M/s. Madras Rubber Factory v. Union of India and Ors.-A.I.R. 1976 S.C. 368, the Supreme Court inter alia has held that where duty was not proved to have been paid under protest, Section 27(1) was applicable and application for refund filed beyond the time fixed by the said section was rightly rejected.
19. In this connection, we may usefully refer to certain observations of Madras High Court in Prem Raj & Ganpat Raj and Co. v. Assistant Collector of Customs, Madras and Ors.-1977 E.L.T, (J 166) and the appellate judgment in the same case reported in 1978 E.L.T. (J 630.) "In so far as the order of the Respondents are concerned, no fault can be found therewith, inasmuch as the application for refund made by the company was actually time-barred, having been presented, as already stated, beyond six months of the payment of duty so that the Customs authorities were bound to reject it in pursuance of the provision of Section 27 of the Act." "Our attention was drawn to the decision of the Supreme Court reported in Madras Rubber Factory v. Union of India, A.I.R. 1976 S.C. 638, where an order of the Central Government passed in further proceedings from an order under Section 27 of the Customs Act was upheld by the Supreme Court in an appeal taken from that order by special leave granted by the Supreme Court. In that appeal, the Supreme Court could not have exercised its jurisdiction under Article 32 of the Constitution but could only have decided the question whether the authority functioning under the Act had acted in accordance with law. This decision is distinguishable. No decision of the Supreme Court where it had refused to exercise jurisdiction under Article 226 of the Constitution in an application tor refund of tax collected without the authority of law, had been brought to our notice." From the above observations, it would appear that while it might be open to the High Court and Supreme Court, while exercising writ jurisdiction under Article 226 of the Constitution of India to order refund of an amount collected without authority of law, it would not be open to an authority like the present Tribunal, which is a statutory body created by the Act, to disregard the limitation set out in Section 27(1) of the Act.
20. Our attention was also drawn to a number of decisions of the Government of India where the Government have ordered refund of amount collected without authority of law even though application for refund was made beyond the time fixed under Section 27 of the Customs Act, 1962. In this connection, it is sufficient to say that while it might be open to Government to refund an amount collected without authority of law in disregard of limitation under Section 27 of the Act, the Tribunal is not as free in the matter as Government could be. Besides, in the instant case, the Government has itself opposed the appeal on the ground of limitation. The decision of the Tribunal must, therefore, rest squarely within the four corners of law. Any other view by the Tribunal would render Sub-sections (1) and (4) of Section 27 of the Act nugatory.
21. The appellants' explanation that the delay in making the claim for refund was due to less charge demand made by the Assistant Collector and, in absence of its finalisation, the appellants could not make an application for refund is not acceptable. There is no provision like Section 5 of the Limitation Act 1963 for extension of limitation fixed by Section 27(1) of the Act. Besides, while for claiming refund of any duty paid by an assessee/importer in pursuance of an order of assessment made by an officer of Customs lower in rank than an Assistant Collector of Customs the assessee/importer may make an application for refund of such duty to the Assistant Collector of Customs, the remedy for challenging assessment made by the Assistant Collector of Customs under Sub-section (2) of Section 28 of the Act, consequent to less charge demand issued under Sub-section (1) of Section 28 of the Act, was an appeal. The issue of less charge demand under Section 28(1) of the Act could not extend the limitation fixed by Section 27(1) of the Act, we reject this argument/contention.
22. It has also been urged by the appellants that the assessment should be deemed to be completed on 18-11-1978 when the matter relating to short levy was closed and that the appellants came to know the exact duty charged on this day only, and for this reason, the application for refund was well in time, The appellants intend to say that the time for making an application tor refund began running only from 18-11-1978 when the less charged demand was withdrawn and assessment deemed to be completed. This argument cannot be accepted for the reasons already stated above. Besides, Section 27(1) (b) of the Act is very clear that the time for making an application for refund is to be computed from the date of payment of duty and, computed from this date, the application for refund was clearly beyond limitation. Our view finds, support from Judgment of Andhra Pradesh High Court in Andhra Pradesh State Electricity Board, Vidyut Soudha v. Government of India, Ministry of Finance (Department of Revenue and Insurance) and two others reported in Journal of Shipping Customs and Transport Laws (1975)-8 (JSCTL) where the High Court following Nityanand v. Life Insurance Corporation of India-A.I.R. 1970 S.C. 209, has in similar facts taken a similar view.
23. As a result of aforesaid discussion, we find that the application for refund made by the appellants was beyond the time fixed by Section 27(1) of the Act and, therefore, barred by limitation. The order of the Appellate Collector of Customs rejecting the appellants' claim as time-barred was, therefore, correct. In view of this finding, it is not necessary to discuss the other point on merits, whether in view of the ship having anchored in Indian waters before issue of the notification on 15-10-1977, the appellants were entitled to the benefit of the notification aforesaid or not. The appeal is, therefore, dismissed and the order of the Appellate Collector of Customs, confirmed,